Mukherjee, Arijit - University <Nottingham> / Department of Economics - 2005
It is usually believed that innovation increases profits of the firms and alsosocial welfare. In a duopoly model with … product innovation, we show that both thesebelieve may go wrong. We show that if the cost of innovation is not very large …,prisoner’s dilemma occurs under product innovation, i.e., each firm earns lower profitwhen all the firms do innovation compared to the …